Thread: $80K in Student Loans... Now What?

I am 28. In undergrad I racked up $20K in student loans, worked for a year and then went back to an art school for 2 years without a job and added $48K to my student loan tab. I couldn't find a job and didn't have the wherewithal to find a source of income so of course the interest payments have starting multiplying over the last couple of years. I am currently at $78,000.

I have had to move back in with my parents while I work a 9-5 that I hate and started a website that earns money but requires too much work to maintain traffic levels. In Fastlane, MJ speaks of moving to another state to jump start his life. I'm seriously contemplating it.

I have saved about $12,000 and if I hadn't read MJ's book, I'd probably use it as a down payment on a house or to pay down my student loan debt but now I have a great idea for an internet business. I have requested quotes from several web programmers and it looks like that's about how much it would cost to build the website. It's very scary and it's kind of a gamble. There's nothing like it in my niche, but I've seen it work extremely well in other niches.

Anybody have any tips or words of wisdom as I embark on the next few months of LIFE CHANGING decisions?

Please share!

I can relate to that, I got my bachelors after getting out of the military thinking that I would not need any student loans, but to supplement I ended up needing an extra $40k in students loans. I couldn't land a good paying job and wanted to start an online business. Found a way to cut the major expenses of an online business by using social media and I'll have my student loans payed off in 2 yrs!

recently I started another company where I teach people how to get started: http://goo.gl/0iDlc

let me know if you have any specific questions.
-Jeremy
jeremy3102@gmail.com

Originally Posted by LadyMillionaire

I am 28. In undergrad I racked up $20K in student loans, worked for a year and then went back to an art school for 2 years without a job and added $48K to my student loan tab. I couldn't find a job and didn't have the wherewithal to find a source of income so of course the interest payments have starting multiplying over the last couple of years. I am currently at $78,000.

I have had to move back in with my parents while I work a 9-5 that I hate and started a website that earns money but requires too much work to maintain traffic levels. In Fastlane, MJ speaks of moving to another state to jump start his life. I'm seriously contemplating it.

I have saved about $12,000 and if I hadn't read MJ's book, I'd probably use it as a down payment on a house or to pay down my student loan debt but now I have a great idea for an internet business. I have requested quotes from several web programmers and it looks like that's about how much it would cost to build the website. It's very scary and it's kind of a gamble. There's nothing like it in my niche, but I've seen it work extremely well in other niches.

Anybody have any tips or words of wisdom as I embark on the next few months of LIFE CHANGING decisions?

Please share!

I had over $60k debt and I am now at $15k, almost done (I'm 31 now).

I think you need to find a fastlane ideas that won't cost much... and reimburse your debts as much as possible during the time that you build your project.

internet projects are the top ones, where you can learn and create in all your spare times. not it's not as full time as MJ would like, but when you owe 80 grand, you need to make some payments and have money to eat... hence the low cost project... a computer, web hosting, domain name and a ton of internet resources... what's important is the right idea!

That's what I'm doing... full time job plus evening and weekends on my project and small business. it's a little slower than leaving my job, but it certainly reimburses my debt faster than waiting to hit the jackpot with a fastlane project.

good luck!

Hakrjak....ouch! best of luck to you, sounds like you have a handle on it.

Originally Posted by hakrjak

We feel your pain. Between my wife and I, we now have about $170,000 in student loans. You haven't lived until you've been blind sided by an extra $1000/month payment that hits you out of nowhere. Even worse, that the government consideres household income when they figure out what your student loan payment should be and they don't just consider the person who's loans it is. Not even sure how that's legal!

Anyway, the only advice I have is to refi to the lowest rate possible and make minimum payments until the end of time. There are some government programs out there now that if you go to work in public service for cities, local governments, states, etc -- they will pay off your loans after 10 years, or they'll offer you a large sum of money up front if you agree to stay for 2 years. My wife is currently considering an offer of $125,000 in exchange for signing a contract to continue working for the state of Colorado for 2 years. These programs depend on your skill level and expertise though -- she's a Neuropsychologist PHD.

Cheers,

- Hakrjak

Unfortunately, I have PRIVATE STUDENT LOANS which is the biggest mistake I've ever made. Refinancing is not possible. Loan Forgiveness is not possible. What is available to me would be less than $5000 so it's not worth my time. I refuse to work at a job I hate for 10 years to get $5000, no thanks. I am bootstrapping the startup and living at home until I get it off the ground. Starting a fastlane business is an absolute necessity at this point. Everything happens for a reason and maybe the forces that be put me in this situation to open my eyes to entrepreneurship and the possibility of traveling the road less traveled.

Originally Posted by LadyMillionaire

Unfortunately, I have PRIVATE STUDENT LOANS which is the biggest mistake I've ever made. Refinancing is not possible. Loan Forgiveness is not possible. What is available to me would be less than $5000 so it's not worth my time. I refuse to work at a job I hate for 10 years to get $5000, no thanks. I am bootstrapping the startup and living at home until I get it off the ground. Starting a fastlane business is an absolute necessity at this point. Everything happens for a reason and maybe the forces that be put me in this situation to open my eyes to entrepreneurship and the possibility of traveling the road less traveled.

You are not alone in your pain and need for change, remember that, and use it to focus your efforts.

I'm in exactly the same boat as you. About $80k in private loans, a 9-5 that keeps me fed and sheltered, and an internet business that I'm currently trying to start. I'm lucky though that I can do the web design and development myself (at least for an alpha/beta release). So if you need advise or insight about anything related to what you are looking for, whether it's price, time, or requirements, definitely shoot me a message. I'm happy to help out someone who's going through the same hell as I am.

The other tips here are absolutely correct, bootstrap the hell out of it. I'm starting small with a limited release, a few initial customers that volunteered to use it as alpha-testers. I'll then build a larger more refined first version based on their feedback, usage and the experience I gain from interacting with them. It's slow, yes, but it forces you to be in complete control which is great.

Again, I'm happy to help if you need advice regarding design or development, and I'm sure you'll find many others here as well.

I'm not sure if you can do this with your student loans, but with mine, I qualified for a super low income adjusted payment plan at first. It's not a good long term strategy for everyone, bc you're just delaying the time that you will have even bigger payments...but if you are committed to a startup (kudos!), it may buy you some time in the short term.

Basically you approach the lender and say 'hey, my income is so low I can't make your payments, can we negotiate a lower payment for now?'. The govt backed loan programs do this so often there's a form for it. If you are actively funding your startup, you may be able to deduct business expenses from your income to qualify for lowest payment. Look on Sallie Mae's website for info on their program, then see if you can get your lender to do something similar.

I had 40k in loans, was able to get down to a $200/mo payment. The bank never asked if my income improved, and I never volunteered the info, then after about 10 years and getting my business successful, I was able to just write a check to payoff the balance. (even though mine were fairly low interest, the moment of paying them off ranks up there with some of the best feelings n life!)

I haven't thought about refinancing. I don't know if I can. The interest on my loan is over 4.25%.

I'd love to brainstorm loopholes. I already thought of a crowdfunding site for normal everyday people to help other people pay off their student loans kind of in the same vein as KICKSTARTER.com, but specifically for student loan debt. I actually polled my readers and over 60% of them said they'd be willing to donate $10-20 a month to help other people pay of their student loans. It doesn't seem like a lot, but 10,000 people donating $10 can pay off a $100,000 student loan. In return, the people who have been helped have to donate back into the organization or maybe they volunteer in exchange for donations to their pay off. If it's a non profit and the donations can be tax deductible, people might be willing to donate larger amounts, companies might even sponsor certain people.

If you think about it... there really is no help for people with ridiculous student loans. Many of these people could do so much more in the world if they weren't working their buts off in the slowlane to fund their education.

Hi LadyMillionaire,

1) 12K (USD?!!) seems to be a LOT of money for website development. I'm guessing it is a complex site?? Take a closer look elsewhere to see what you can find. I'd definately go overseas for this as the US is expensive. If you go this route it might be best to start with a much smaller project so you get the hang of it.
Cheapest site to outsource stuff on is fiverr.com I take it you've heard of it? It is a site where people offer to do all kinds of things for $5 and it is addictive as hell! Anything from having a website built (wordpress clone they built at a click or two and get $160 from an affiliate program such as hostgator) to people wearing signs around their neck promoting your business. I'm gonna order our next family portrait from there from this dude who alters the photo so we will look like Na'vi (blue creatures from Avatar).

2) Traffic shouldn't be all that time consuming especially if you have a system down. Check out IM forums to figure out how to outsource this to free up your time / or scale the operation so you get more traffic. If your site is making money regularly then you have accomplished something that most people who venture into IM never do - congrats!

Strewth&Dodgy,

I am not spending $12K on the site, probably $5K at the most. It is very complicated and I'm not just building a static website, it's more like a social network so I need to work with professionals that know what they are doing. Fiverrr is a cool idea, but what I need to have done... I don't trust anybody who'd do it for $5. $5 a minute is more realistic. I just don't have the time to tinker with something because it's cool... even if it is only $5. I am working with programmers from India.

I think if MJ could sell limos.com for $3-7M, the site that I am building in this niche will probably sell for $25M or more in the next 5-10 years. It's something that everyone uses... I have no doubt that it will work, but time is of the essence.

I much rather spend $5K up front and have a professional take care of it rather than it take me months or years to learn the programming language. When I turn a profit from the site, I'd most likely always outsource the programming and just handle the Marketing/Social Media myself.

*Cha-ching*

It is difficult for those of us who entered Indentured Servitude when we were younger to start fresh later. I am paying off student loans myself, and have had to get over some anger at my dumb past decisions. I am definitely spreading the word that college is quickly becoming a scam for most people, except those who are in inexpensive programs that train a person for jobs that are in high demand. That any school would encourage someone to go into debt almost $50,000 for an art degree shows that colleges are all about money and not about realistically training people to be successful in life. And I am not judging you, trust me. I went into debt for a similar amount for a similar degree.

To your question, $12,000 is pretty high for a website. A friend of mine used the Odesk website to find a web-developer in Latvia who designed a full page template for $400. Once he designed the basic template, my friend could then re-use that over and over for his different pages. This requires a basic knowledge of HTML (to insert text into the code) and how hosting, FTP, etc works, but that is not difficult to learn. Good luck!

LadyMillionaire,

I just noticed you were working with an Indian Developer, so my suggestion of Odesk is probably something you already know about. At any rate, good luck with your new venture!